The pandemic spawns a byproduct. Online sports betting, driven by the online play of customers forced to improvise indoors, has become monolithic.
The North American market sprawls with states racing to legalize, legislate and benefit from gaming’s golden goose. New Jersey delivered more than $900 million in November after exceeding $800 million in October. That’s nearly $2 billion in two months.
The numbers shatter expectations on two fronts. One, few envisioned the pandemic’s duration, forming a new market of gamblers seizing tablets and mobile phones to gain instant action. Second, the proliferation of mobile technology enables robust revenue. It attracts new players and expands the menu option for experience gamblers.
A number of companies have stepped to the forefront.
Continuing to Roll
Kambi powers more than 30 operators on six continents, and all benefit from the data and insights it gathers from the industry’s premium sports betting network, according to Evan Schaffner, Kambi’s general manager in the United States.
Schaffner says the strength of Kambi’s outsourced sportsbook model helped its partners address challenges brought by the pandemic throughout 2020.
Kambi works on a revenue-share basis with its partners, extensively reducing the fixed costs associated with having the sportsbook function entirely in-house, Schaffner indicates. This helped partners navigate problems without large overhanging fixed costs from the sportsbook.
Kambi and its partners prospered after the adversity because a secondary market developed.
“The initial lockdown situation and corresponding curtailment of much of elite-level sports naturally had an impact, but one of the key benefits of being a global sports betting supplier is that Kambi has long maintained a deep offering across all sports,” Schaffner says. “The second quarter of 2020 shed a greater degree of the limelight on traditionally more niche sports such as table tennis, UFC and darts, with table tennis being the top ranked sport for two months. Of those players that did continue to bet on these sports, we saw an appreciable rise in the ratio engaging with our live offering.
“We also saw really high levels of enthusiasm when more popular sports such as basketball, baseball and golf did return, and Kambi’s commercial performance throughout 2020 underlined our ability to respond efficiently not only to the lockdown situation, but to ensure that resources were in place as those sports returned.”
Schaffner notes that American sports bettors increasingly engage with live betting along with “instant markets” like the result of the next pitch in baseball or the next point winner in tennis.
In-game betting has long been a stronghold in Europe, where it accounts for roughly 80 percent of the action, according to industry experts. The concept rapidly catches on here.
“The quality of the in-game offering is now the key differentiator between an excellent sportsbook and a merely good one,” Schaffner says. “Providing this requires a supply chain capable of delivering on all levels, beginning with the integration of official data partners and proven algorithms that process the data, followed by excellence in trading and risk, which must all be supplied through a fast and intuitive front end. Only when these elements are working in perfect harmony can an operator begin to deliver a best-in-class in-game service.”
Schaffner predicts that the quality of the in-game offer will be increasingly key in the battle for market leadership in 2021. “Low delays and high levels of market availability are crucial, and this is an area in which we are well equipped to compete and support our partners,” he says.
“In the absence of a crystal ball, predictions are always tricky, but it’s no secret that several states, including the likes of New York, are looking to expedite regulation with a focus on mobile. Kambi has underlined our pedigree and ability to meet any regulatory requirements, recently launching four of our partners on day one of online regulation being active in Michigan. We have a number of ambitious partners keen to capitalize on the spread of regulation, and Kambi will be there to help them achieve this.”
Groundwork Becomes Jackpot
From foresight to fortune, IGT thrives with PlaySports.
Matteo Carli, senior vice president of Global PlaySports, ETG and poker, believes IGT reaps the reward of previous sports-betting investment.
“Several years before the 2018 repeal of PASPA, IGT was hard at work refining its PlaySports platform specifically for the needs and opportunities of the U.S. market,” he says. “That effort put us ahead of many of our competitors and resulted in a scalable, market-ready, localized product that was ready for immediate deployment by the time PASPA was repealed.
“During a three-plus-year R&D cycle, IGT maintained its focus on cultivating a versatile solution that could grow in parallel with market opportunities and serve a wide variety of operators including the largest B2C brands, commercial and tribal-run casinos, racetracks and lotteries.”
IGT now capitalizes on the market position it obtained.
“Today, we offer the leading, most comprehensive and highest-performing omnichannel sports betting platform in the U.S. market,” Carli says. “Now powering sports betting in 16 U.S. states and at more than 50 gaming venues, IGT maintains an ongoing dialogue with its customers to ensure its innovation roadmap is aligned with player demands and market opportunities.”
Carli says IGT’s platform-integrated Player Account Management (PAM) tool is an example of a customer-driven product evolution that has been introduced since the company launched its first platform in 2015. The PlaySports PAM enables operators to drive player acquisition and retention through personalized offers and promotions in real time, through an embedded solution. This feature also supports IGT’s position as a total sports betting solution provider.
“With innovations such as the PlaySports PAM and services such as our recently launched Trading Team, the PlaySports platform has matured to a turnkey partner for establishing and growing a sports betting enterprise,” Carli says. “The PlaySports platform also supports a range of intuitive self-service betting technologies such as PlaySports Kiosks, PlaySports Pad and the CrystalBetting Terminals. Each of these solutions extends the reach of retail sports betting and gives players more choice and convenience for when and where to place their sports wagers.”
Carli remains bullish on the overall impact of PlaySports. It can service markets of varied size.
“One of the greatest attributes of the PlaySports platform is its scalability,” he says. “This quality enables IGT PlaySports to service large, multi-state operators such as FanDuel, independent casinos such as The Mill Casino, mobile-only enterprises such as Circa in Colorado and effectively everything in between. The hub-and-spoke architecture of our platform is central to our multi-state customers’ success, and provides a cost-effective path for managing multi-state operations and adding new ‘spokes’ to their enterprise as new sports betting jurisdictions open up.”
Carli says that by expanding its footprint with FanDuel and others over the last several years, IGT has gained tremendous high-volume experience in the U.S. market
The pandemic, meanwhile, hasn’t halted IGT’s optimism for the future.
Carli predicts that sports-betting’s growth, which outpaces the rest of the North American gaming market, will continue. He cites a tremendous player demand for this form of entertainment, coupled with state governments looking for tax revenues.
“As operators build their land-based businesses back to pre-pandemic levels, adding retail sports betting is a clear path to elevating casino visitation and diversifying player demographics,” he says. “I believe we’ll continue to see operators complementing their retail sportsbooks with mobile betting options, be it with on-premise mobile apps like what IGT powers in Mississippi or via online solutions. As consumers become increasingly more comfortable and expecting of mobile entertainment, it is only natural that sports betting becomes more readily available in this format.
“I think this is true of iGaming, too. As we all recently observed in Michigan, there is tremendous demand for both sports betting and iGaming, and growing both segments in tandem has proven to create significant player engagement.”
In the midst of the sports-betting craze, Carli expects IGT to have wider deployments for its award-winning Crystal Betting Terminal and other self-service betting technologies.
GAN spreads its wings, bringing sports-betting capability into simulated gaming and real-money operations.
It annexed the third piece of the puzzle with the acquisition of Coolbet, first announced late last year and moving toward finalization in 2021. GAN is a leading business-to-business supplier of internet gaming software-as-a-service solutions to the U.S. land-based casino industry. By adding Coolbet for approximately $176 million in cash and stock, it became a sportsbook player.
- Integration of Coolbet’s industry-leading, proprietary sports betting technology into GAN’s current B2B technology stack began in earnest pending closing of the transaction.
- Expecting broad availability of integrated offering for the U.S. market no later than Q3 2021.
- Transaction is expected to be immediately accretive.
- The €149.1 million ($175.9 million) purchase price was established on a “cash-free, debt-free” basis.
Coolbet arrives just in time to impact the GAN lineup. Sports betting is an enticement for all forms of its operation. Lucrative markets looming in New York state wrangle with how, not if, sports betting will emerge. Michigan and Virginia crossed that threshold in January, starting online operations.
“Sports betting in the United States is the No. 1 topic in all of gaming,” says Marcus Yoder, senior vice president of sales for GAN. “The revenue is there for that. This is not for the faint-hearted. We view this as a significant growth opportunity.”
CoolBet gives GAN a third major prong in the gaming world.
One of them is its social casino. Online, players receive video chat hosts, participate in slot and table tournaments and play both classic titles and new games from major manufacturers before those titles are placed on the casino floor. Offline, players can be treated to exclusive rewards, loyalty points and in-casino amenities based on their online purchasing or non-game play.
“We continue to sign major new simulated gaming partners,” he says. “Some are signing up and even if they don’t see the future for real-money gaming with us, they want to engage their players.”
It can work via several methods. In one example, a player goes to a simulated site and purchases 100 million virtual credits that may equate to $100 via Amazon. The loyalty points have nothing to do with the outcome, but the customer likes playing.
“Whales drive the business,” Yoder says. “We have VIP players on all of our simulated gaming sites. They are depositing and playing with thousands of dollars a month, making online purchases and using virtual currency.”
A real casino operates online, with real-money games. In some cases, that includes a live dealer operating from a studio dealing cards out to players online. It enables patrons to realize the VIP gaming experience, Yoder says. The CoolBet realm enables GAN to help a casino power a sportsbook. GAN now presents simulated gaming, real gaming and real impact in the sportsbetting world.
BetConstruct Enables Pinnacle
BetConstruct is a global award-winning technology and services provider for the online and land-based gaming industry. The company obtained a roaring 2021 start with the integration of Pinnacle Sports’ sports betting offer onto its platform and its further supply to operators.
The company stakes its claim to open its platform to third-party sportsbooks.
The partner-oriented approach led to what BetConstruct considers a landmark deal, embracing one of the company’s key partners, Vbet. Company officials say that Vbet will utilize the iFrame solution, giving its end users across a number of territories access to a market-leading array of betting content, including an award-winning esports betting product.
That product, catered for Pinnacle Sports, comes with expert risk management and is available under its iFRame API solution alongside BetConstruct’s betting offer.
“This partnership with BetConstruct, covering both its B2B and B2C arms, showcases the flexibility of our Pinnacle Solution sportsbook offering and ability to service client needs, whatever they may be,” says Paris Smith, CEO of Pinnacle Sports.
“Having seen encouraging early results, we’re confident that this partnership will continue to be a successful one, with BetConstruct proven to deliver results across its own brands, as well as for its B2B partners who can now supply their customers with our market-leading sports betting content.”
Throughout the industry, the sports betting scramble ensues.
In retrospect, this may be viewed as a time when operators regrouped and reset. They’ve changed bingo venues into large, well-spaced slot parlors. They have obtained safety products. They have become attuned to social distancing.
But they also increased their involvement with sports betting platforms, the next cash cow.